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Presidential helicopter is canceled
Navy ends contract for VH-71
Wednesday, June 3, 2009
 Click here to enlarge this photo Photo by Lockheed Martin
Delays and cost overruns have terminated the VH-71 program.
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It's now official. The Navy announced Monday that it is ending the $13.5 billion contract for the presidential helicopter, known as VH-71, with Lockheed Martin Systems Integration in Owego, N.Y.
This announcement follows a Department of Defense decision announced May 15 by Ashton Carter, the undersecretary of defense for acquisition, technology and logistics, to cancel the existing presidential helicopter replacement program, which had been under a stop-work order.
There have been nine helicopters built so far, four test vehicles and five pilot production vehicles, according to Lt. Cmdr. Victor Chen, a spokesman for the U.S. Department of the Navy. Two of the test helicopters and two of the pilot production vehicles are still at the Presidential Helicopter Support Facility at Patuxent River Naval Air Station.
To date, according to Chen, $3.2 billion has been spent on the production of this program.
Termination costs have not been determined, Chen said, but negotiations are ongoing with Lockheed Martin and with the Department of Defense.
"From our perspective, we still have a lot of work to do with this program," Chen said. "There have been a lot of discussions, but nothing has been determined."
The idea to build a new presidential helicopter began after Sept. 11, 2001, when the Bush White House decided it wanted a fleet of helicopters that would be safer and would offer increased communication capability for the president in case of another terrorist attack.
The new helicopters were to replace the current fleet of VH-3D and VH-60N helicopters used by the president for flights inside the continental United States.
After competitive bidding, Lockheed Martin Systems Integration, along with its partner, AgustaWestland of Italy, was awarded a contract in January 2005 to build the VH-71.
The initial program was divided into two phases, or increments. Increment 1 was to provide five helicopters by September 2010. Increment 2 was to provide 23 more helicopters with more advanced technology by 2017.
Cost overruns from additional requirements became a huge issue for the program, which was initially intended to cost $6.5 billion.
In January 2009, Navy officials confirmed that the program had suffered a "Nunn-McCurdy breach" and that the total program costs at that time were expected to increase from $6.7 billion to $11.2 billion. The Nunn-McCurdy law requires the Defense Department to notify Congress whenever a major defense acquisition program breaches an established cost overrun threshold. The Pentagon must certify that a program is essential to national security or else face cancellation of the program.
In February, during a White House conference on fiscal responsibility, President Barack Obama questioned the need for a new helicopter, as did his opponent in last year's election, Sen. John S. McCain (R-Ariz.).
"The helicopter I have now seems perfectly adequate to me," Obama said, and then added, "I think it is an example of the procurement process gone amok. And we're going to have to fix it."
Obama directed Defense Secretary Robert Gates to conduct "a thorough review" of the VH-71 program.
The Obama administration requested $85 million in its 2010 defense budget proposal to shut down the program and to look at other planes to replace the current presidential helicopter fleet.
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